UTEL Returns to Government Fold

In an interview with Infobank, Ukrtelekom former sales manager, People's Deputy, Oleh Shevchuk noted that this process might last until the end of 1999 due to a Cabinet of Ministers ban on governmental loan guarantees to enterprises that have not yet repaid previous debts. Ukrtelekom is to completely repay a French loan only in 2004.

However, the government seems inclined to make an exception. For Ukrtelekom, already possessing 51% of UTEL stock, could, in the words of Mr. Shevchuk, quite easily receive loans from Germany's Commerzbank and Deutsche Bank which took part in the evaluation of UTEL, and from the European Bank for Reconstruction and Development. Talks are already underway for them to pay $200 million. And having bought out UTEL and keeping it intact as an internally self-contained unit, Ukrtelekom could raise its sales price for privatization, which has dropped recently from $4.5 billion to $2.5 billion.

However, last Wednesday Parliament rejected and asked the government to rework its resolution on pulling the telecommunications industry out of the crisis, which provided, among other things, for lifting the restrictions on Ukrtelekom government guarantees. During the debate, the Left suggested that the provision about Ukrtelekom privatization be deleted from the resolution text. Yet, the bill was not adopted even after this suggestion was accepted.